Information Quality and Endogenous Project Outcomes

43 Pages Posted: 2 May 2014 Last revised: 17 Jun 2018

See all articles by Mingcherng Deng

Mingcherng Deng

City University of New York (CUNY) - Baruch College

Lin Nan

Purdue University

Xiaoyan Wen

Texas Christian University

Multiple version iconThere are 2 versions of this paper

Date Written: June 12, 2018

Abstract

In this study, we show that when a firm needs external financing, information quality has real effects via financing contracts on the firm’s input to influence its operational outcome. Interestingly, we find that higher information quality decreases overall efficiency. Our analysis highlights the importance of considering the role of information quality in the presence of the firm’s input decision upon financing contracts. In particular, information quality has a feedforward effect on the firm’s real input decision via financing contracts, which in turn has a feedback effect on financing contracts and overall efficiency.

Keywords: Information Quality, Input upon Financing Contracts, Financing Needs

JEL Classification: M41, G32, M48, G21

Suggested Citation

Deng, Mingcherng and Nan, Lin and Wen, Xiaoyan, Information Quality and Endogenous Project Outcomes (June 12, 2018). Contemporary Accounting Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2431418 or http://dx.doi.org/10.2139/ssrn.2431418

Mingcherng Deng

City University of New York (CUNY) - Baruch College ( email )

One Bernard Baruch Way, Box B12-225
New York, NY 10010
United States

Lin Nan

Purdue University ( email )

100 S Grant St
West Lafayette, IN 47907
United States
7654960551 (Phone)

Xiaoyan Wen (Contact Author)

Texas Christian University ( email )

M.J. Neeley School of Business
TCU Box 298530
Fort Worth, TX 76129
United States

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